Bye bye Starmer

[Broccers]

So you lot are happy with IHT and its threshold being frozen at 325k since Aprild 2009? That's the problem with this tax - it catches too many people because it's set too low.

If we assume that it's not going away, it does seem really stupid that it isn't index linked.

IHT on >£325k in 2009 would be the equivalent of IHT on > £545k today......

Exactly, which is much more 'fair'.

Obviously if you put your stuff in a trust it negates the potential bill but many peoples do not do this or understand the benefit of doing so.

[Jobbo]

So you lot are happy with IHT and its threshold being frozen at 325k since Aprild 2009? That's the problem with this tax - it catches too many people because it's set too low.

https://www.gov.uk/government/publicati ... rest-rates

So the party which has just been elected in 2024 is responsible for the lack of increase in the thresholds from 2010-2024? Right... You're incredibly hard of thinking.

[Beany]

Do you think he had to borrow a JCB to move those goalposts to something he thought he'd get a gotcha out of?

[Simon]

Again with this complete lack of touch with reality. according to gov figures 4% of estates pay inheritance tax, because £325k is a lot of money.

According to Reeves herself, in her budget speech, it's 6% now. And that number is only going up.

[Mito Man]

The IHT threshold increase is interesting, more as a reflection of the economy. You can see the 1992 recession meant they froze it for 3 years and the 2009 recession freeze is still ongoing. Which tallies up with the terribly slow recovery and lack of productivity. Clearly austerity wasn't the answer when you compare our recovery with other economies but it doesn't seem like things are particularly changing.

[ZedLeg]

Still a long way from anything but a tiny minority though.

I said before I don’t necessarily have a problem with making the threshold higher. Make it £3mil with no exemptions or allowances.

[Broccers]

So you lot are happy with IHT and its threshold being frozen at 325k since Aprild 2009? That's the problem with this tax - it catches too many people because it's set too low.

https://www.gov.uk/government/publicati ... rest-rates

So the party which has just been elected in 2024 is responsible for the lack of increase in the thresholds from 2010-2024? Right... You're incredibly hard of thinking.

So the party who just got elected could change it but didn't. You also ignore my comment about trusts but hey, obviously not as important than child like bitchin.

[Simon]

Still a long way from anything but a tiny minority though.

I said before I don’t necessarily have a problem with making the threshold higher. Make it £3mil with no exemptions or allowances.

If IHT is really sticking around then yes, a more realistic threshold is better.

Another idea that I heard that is more palatable would be to shift the threshold from the estate to the recipient. That being that you can inherit £x in your life before being taxed % over £x. This would be more equitable where a large estate has a large number of recipients. So, say, you can inherit £1m in your life before being taxed IHT on the excess. Also index linking of this threshold.

At least that way everyone gets the same 'allowance' rather than what we have at the moment.

[Rich B]

So you lot are happy with IHT and its threshold being frozen at 325k since Aprild 2009? That's the problem with this tax - it catches too many people because it's set too low.

If we assume that it's not going away, it does seem really stupid that it isn't index linked.

IHT on >£325k in 2009 would be the equivalent of IHT on > £545k today......

Exactly, which is much more 'fair'.

Obviously if you put your stuff in a trust it negates the potential bill but many peoples do not do this or understand the benefit of doing so.

I’m not sure “ignorance” is a great excuse when it comes to managing your own wealth?

If you have many hundreds of thousands of pounds of assets and you’re worried about IHT - then go and see a financial advisor.

[GG.]

Another idea that I heard that is more palatable would be to shift the threshold from the estate to the recipient. That being that you can inherit £x in your life before being taxed % over £x. This would be more equitable where a large estate has a large number of recipients. So, say, you can inherit £1m in your life before being taxed IHT on the excess. Also index linking of this threshold.

This is an excellent point and one I hadn't really considered before - one child inheriting 100% versus 4 inheriting 25% should not be taxed equivalently.

Much in the same way as it is inequitable to tax a one high earner family much more than two cohabiting lower earners. Allowances should be transferable between cohabiting spouses.

[ZedLeg]

I don’t hate that idea tbh.

[mik]

Until a couple of years ago, I assumed that's how it already worked.

[Simon]

I don’t hate that idea tbh.

I knew we could find some common ground.

A large estate of an elderly relative that's distributed amongst maybe a dozen or more offspring, grandchildren, cousins, etc etc shouldn't be taxed at 40% out of the gate. Let's shift the burden to the recipient, and it would be doing exactly what IHT proponents claim that it's for - to stop the accumulation of wealth in a few by distributing it widely.

[ZedLeg]

I’m not unreasonable, just diametrically opposed to most of this forum on most issues

[Jobbo]

You also ignore my comment about trusts but hey, obviously not as important than child like bitchin.

No, that is a good point - I did ignore it. You can't simply divest yourself of assets by putting them into trusts without considering quite a lot else; many attempts to do that fail (e.g. gifting your house to your kids to avoid care home fees eating away at its value and IHT charges). It is one method of IHT planning but has to be considered as a whole.

[Jobbo]

A large estate of an elderly relative that's distributed amongst maybe a dozen or more offspring, grandchildren, cousins, etc etc shouldn't be taxed at 40% out of the gate. Let's shift the burden to the recipient, and it would be doing exactly what IHT proponents claim that it's for - to stop the accumulation of wealth in a few by distributing it widely.

I don't see that would work or be consistent with any other tax regime (CGT, SDLT etc). Also IHT is not simply to stop the accumulation of wealth by the few, it's a part of the overall tax receipts this country needs to operate and is relatively easy to collect and administer.

First, why should it matter how many beneficiaries there are of an estate (though I'm not sure if that is part of your point)? A couple with a few millions in assets on death and one child shouldn't have their estate taxed differently to a similarly wealthy couple who have 4 kids and 16 grandchildren.

Second, the recipients are going to have differing tax treatments; if they are children they won't even be doing tax returns. The amount of administration that would take would be enormous compared to one return for the deceased.

Third, beneficiaries of estates can decline to receive their bequest or even enter into deeds of variation to pass the estate on to someone else, so there are plenty of opportunities for tax dodging/shifting using your method.

[GG.]

it's a part of the overall tax receipts this country needs to operate

Normative judgment klaxon

I think you mean it is part of the political choice made in respect of where to raise revenue to meet the level of spending our politicians have decided is necessary.

I always wonder how much of the UK's expenditure I could cut without the general public realising it? I expect it would comfortably be enough to eliminate the need for every tax other than income tax, NICs and VAT. That said - it wouldn't quite work like that as I would re-allocate a lot of the wasted funding to areas with more valid need. Crime, policing, prisons, capital infrastructure. Pay in the NHS would go up (for those remaining...) as part of a co-opted insurance / state funded based system.

ETA: IHT, CGT and SDLT raise a mere 4% of the trillion pounds of tax generated every year. They could be easily eliminated should the desire be there.

[Simon]

First, why should it matter how many beneficiaries there are of an estate (though I'm not sure if that is part of your point)? A couple with a few millions in assets on death and one child shouldn't have their estate taxed differently to a similarly wealthy couple who have 4 kids and 16 grandchildren.

But that's my point - it _should_ be treated differently, because we are talking about what people inherit rather than what people leave, and I believe this is more equitable, and it would encourage people to plan to share their wealth more when they pass.

Second, the recipients are going to have differing tax treatments; if they are children they won't even be doing tax returns. The amount of administration that would take would be enormous compared to one return for the deceased.

Unless they're a YouTuber/influencer/Earl... Not every adult will be doing tax returns either. I'm only just becoming eligible for them again, for various reasons. Surely there's a way to link up an estate value of the deceased with the recipients 'gift' that could then be subject to IHT assessment.

Third, beneficiaries of estates can decline to receive their bequest or even enter into deeds of variation to pass the estate on to someone else, so there are plenty of opportunities for tax dodging/shifting using your method.

Yeah, good isn't it?

[ZedLeg]

Sounds a bit like Musk’s claim that he can cut a third out of the US budget and no one will notice.

[GG.]

Well - people will notice - the people that have money funnelled to them for no productive output. I think that's what Musk said re the federal government - 1/3 can be more gainfully employed elsewhere. I really hope he's successful in this as it will demonstrate to others what can be done - even with ridiculously generous severance packages.